Apple Dividends Don't Wow—for Now

Shares yield 3% now but could yield 5% of today's stock price by 2015, with only modest earnings growth.

Apple, with its gargantuan $145 billion cash hoard, is pulling out the stops to regain investor affection, and yet skepticism continues to rule the day. However, we are confident that patient investors will be amply rewarded.

In November, this column argued that Apple (ticker: AAPL) could double its $10 billion annual dividend spending within three years (see Ahead of the Crowd, "Apple's Dividend Set to Surge," Nov. 8, 2012). After Tuesday's market close, it did one better. It raised the dividend payment 15%,...